WOOD Group has won a contract to supply technology which it believes will help a Canadian firm slash the cost of an oil sands project amid the crude price plunge.
The Aberdeen-based oil services giant said it will supply well pads for Suncor Energy’s Firebag operation onshore Alberta, using technology it developed in response to growing concern about the costs of such developments.
Suncor uses steam to help produce heavy bitumen from the sands at Firebag.
The economics of such projects have become less attractive following the slump in oil prices since 2014.
Brent crude has risen around 15 per cent in the last fortnight after Opec countries and Russia made noises about cutting production. It is still only trading at around $53 (£43) per barrel, compared with $115/bbl in June 2014.
Wood said the company’s design will allow Suncor to install pairs of well pads for around $2 million each, following a standardised approach, compared with up to $9m previously. One well will be used for steam injection and the other for oil recovery at Firebag.
Oil and gas companies in the North Sea are being encouraged to standardise procedures to help reduce the cost of developing and running fields.
Wood Group has been hit hard by the slowdown in activity in the core North Sea market which was triggered by the crude price rout.
Chief executive Robin Watson has been trying to reduce the company’s reliance on the North Sea market.
He said: “Our standard well pad design provides heavy oil producers the opportunity to lower costs and increase profit margins.”
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